why the shares fell and then rebounded

Congo Government Wants 35% of Mine Projects in Code Changes

The Democratic Republic of Congo may increase state participation in mining projects to 35 percent from 5 percent and raise royalties on mineral exports, according to a report obtained by the country’s business association.

The 35 percent stake would be acquired for free and could not be diluted, according to the report, which was prepared for an inter-ministerial commission set up to revise Congo’s 10- year-old mining code. The report was given to Bloomberg by a member of the business association, known by the French acronym FEC.

Congo is the world’s largest cobalt producer and was the tenth-largest exporter of copper last year, according to CRU Group, a London-based research company. Photographer: Naashon Zalk/Bloomberg News

“These proposals will be submitted to all parties for a consensus,” Mines Minister Martin Kabwelulu said in a mobile- phone message today. The changes to the code will be negotiated at a workshop to be held at an unspecified date, Kabwelulu’s chief of staff, Valery Mukasa, said in an Oct. 25 e-mail.

Congo is the world’s largest cobalt producer and was the 10th-largest exporter of copper last year, according to CRU Group, a London-based research company. The Central African nation, which is almost the size of Western Europe, also has deposits of gold, iron, diamonds, tin and coltan.

Shares Fall

Banro fell 5.8 percent to C$4.35 at the close in Toronto. Naomi Nemeth, a spokeswoman for Toronto-based Banro, said that the proposals, if implemented, would have no impact on the company because it isn’t subject to Congo’s mining code.

“Banro has a mining convention, which is unique in Congo,” Nemeth said in a phone interview. “Banro doesn’t fall under the mining code.”